(Corrects CBOE name in first graph to delete the word “group”)
* Nasdaq’s going-private talks put option on radar: Tilly
* CBOE shares rise 2.3 pct, hitting highest since 2010 IPO
By Ann Saphir
Feb 14 (Reuters) - CBOE Holdings Inc, which became a publicly held company in 2010 after years of effort, would consider going private again if doing so benefits its shareholders, a top executive said on Thursday.
Before revelations earlier this week that private equity firm Carlyle Group had approached Nasdaq OMX Group Inc about taking the exchange operator private, doing so “would not have been a logical exploratory change in governance and ownership structure,” CBOE’s Chief Operating Officer Edward Tilly told a Credit Suisse financial services forum.
But now that news of the talks has put the possibility on the radar screen, “We still must act and are looking forward to acting in the best interest of our stockholders,” he said. “If valuations as a result of conversations with Carlyle lift all boats, so be it ... We would have to entertain changes in our structure.”
CBOE shares hit a record high, rising 2.3 percent to $35.80 on the Nasdaq Stock Market.
CBOE Chief Executive Bill Brodsky waged a years-long campaign to convert CBOE from a private club run by its members to a public company run for profit. Reversing that hard-won victory seems an unlikely step for Tilly, who is in line to take over as CEO in May.
Going public allowed CBOE for the first time in its nearly 40-year history to make strategic decisions without the cumbersome process of consulting hundreds of members, and to better compete in the crowded field of U.S. stock-options exchanges.
“We are getting into a nice rhythm as a public company,” said Tilly, who joked that he would not have had the chance to leave Chicago’s cold winter to speak at the investor forum, taking place in warm Miami if CBOE was a private company.
Tilly’s comments fell short of suggesting he is eager to take the exchange private, and a CBOE spokeswoman declined to comment on whether the company has engaged in any go-private talks.
But he left the door open to the possibility in a way that the chief of Chicago’s other major exchange operator, in remarks to the same forum on Tuesday, did not.
CME CEO Phupinder Gill said he did not see “the advantage of going private at this time.”
“I do have a sense that something is happening with CBOE, because the stock has just been bit by bit clawing its way forward,” said Thomas Caldwell, chairman of Toronto’s Caldwell Securities and the owner of about 1.8 million CBOE shares.
Citing the regulatory expense of being a public U.S. company, and noting that other firms, including struggling computer company Dell Inc have moved to go private, Caldwell said he could understand the move from a cost perspective.
“And it would also drag any potential suitor who was lurking in the bushes, out,” he added.
The talks between Carlyle and Nasdaq fell apart over a disagreement on price, sources told Reuters on Monday.
CBOE would need to see an offer of $38 to $40 a share in order to get investors to tender their stock, Caldwell said.
“If (Tilly) plans go private at an exorbitant price I am wildly in favor,” Caldwell said. “I certainly can understand it, given the costs and pitfalls of being a public company.” (Reporting by Ann Saphir; Editing by Gerald E. McCormick, Kenneth Barry)